The Big Picture

Oil Bubble?

Friday, May 09, 2008 | 10:51 AM

My friend Paul points to this report by Factset, titled: An oil bubble to rival the internet boom.

The difficulty with the bubble moniker is determining exactly how much of the price is being driven by purely speculative factors. With Crude, a variety of forces are driving prices: A combination of both fundamentals (increasing demand, constrained supply, pipeline problems), technicals (Trend, money flow, etc.), along with the geopolitics of two Middle East wars -- as well as some speculation.

Additionally, we have seen the general perception of commodities shift, where they are now seen as a more legitimate asset class for portfolio managers, along with Equities, Fixed Income, REITs, cash, etc. than it has been previously.

Even If I disagree with the bubble thesis, I love any report festooned with lovely charts, and this one is no different:

Source:
An oil bubble to rival the internet boom (PDF)
FactSet, 3 May 2008
http://www.factset.com/websitefiles/PDFs/outlook/english/03-05-2008english.pdf

What's Next for Crude Oil ?

Friday, May 09, 2008 | 06:39 AM

in Commodities | Contrary Indicators | Energy | Psychology/Sentiment | Technical Analysis

>
"The commodity looks like it has legs, which is trader talk for its going higher. While I do not make a habit of forecasting commodity prices, $110, and then $125 are our next two targets.

I got your core inflation right here . . ."

>

That was our March 3rd quote on energy prices.

As Bloomberg reported this morning, Crude was $125; As I write this, CNBC is flashing that Crude is over $126 a barrel.

We have been Bullish on Oil and energy stocks for a long time. Our first recommendation of Crude Oil was back in 2003, when the price broke out over $32 per barrel. I picked Energy as my favorite sector for the Business Week forecasts for 2004 -- something that more than a few people ridiculed at the time.

In 2004, we observed our target of Oil = $50 a Barrel was hit. I also explained why at $40-50 there was no “terror” premium (comments picked up by WSJ, Barrons, and Slate).

Early on, we recognized that it was Chinese Oil Demand underlying the increase in cost. We also looked at why Refining Capacity was a problem. We have examined Global Crude Oil Demand & Gasoline, we looked at Oil: Inflation adjusted.

We looked at whether Oil Jitters Gotten Overblown?. That answer was no. We also looked at the question: Do Higher Oil Prices Lead to Recessions? Turns out the answer is yes. Large Hedge Funds who had been ignoring our bullish energy advice did so at their own peril.

So where does that leave us in 2008?

Well, we have political considerations with the US presidential elections, upcoming Summer Olympics in China, an ongoing war or 3 in the Middle East, and of course, a weak dollar (which is now in a counter-trend rally).

Let me offer one last way to think about Energy: Its relative strength versus precious metals.

As the dollar has strengthened, precious metals have gone south. Yet Crude oil has continued upwards, implying that this is more than a mere currency story.

Dennis Gartman writes:

"All things being equal, if one were to hear that crude would be $2/barrel higher and then were asked how much stronger gold would be, one would answer, swiftly and with confidence, "Oh, at least $5-$10/ounce." Wrong!! Gold's down $6/oz, sending the gold/crude ratio to new lows for the past several years. At the current levels, it now takes 7.06 barrels of crude to "buy" one ounce of gold. 15;1 is rather more "normal."

Have a look at this ratio in a 3 year chart:

graph via Stockcharts

I'll see if I can find produce a longer term chart of the ratio above -- it might be revealing.

~~~

Its funny, but I got a lot of grief over an $86 forecast several years ago -- but $125 was pretty easily accepted. That implies a major change in psychology is taking place.

More on this in the coming weeks . . .

Sources:
The Gartman Letter
Dennis Gartman,
Thursday, May 8, 2008
http://thegartmanletter.com/

Crude Oil Rises to Record Near $125 a Barrel on Supply Concern
Grant Smith and Christian Schmollinger
Bloomberg, May 9, 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=auqhuZnpEFFE&

Oil = $124

Thursday, May 08, 2008 | 03:35 PM

in Commodities | Energy

Wow: Briefing is reporting that COMDX electronic trade has crude above the $124 level, now up 65 cents to $124.18.

Crude Oil Futures, June Contract

Graph courtesy of Bar Charts

WTF Headline off the Day? GS Says Oil 'Likely' to Reach $150-$200

Tuesday, May 06, 2008 | 09:00 AM

in Commodities | Energy | Technical Analysis | Trading

Today's WTF headline isn't a criticism of the financial media so much as a disturbing forecast:

Goldman's Murti Says Oil `Likely' to Reach $150-$200
Crude oil may rise to between $150 and $200 a barrel within two years as growth in supply fails to keep pace with increased demand from developing nations, Goldman Sachs Group Inc. analysts led by Arjun N. Murti said in a report.

New York-based Murti first wrote of a "super spike'' in March 2005, when he said oil prices could range between $50 and $105 a barrel through 2009. The price of crude traded in New York averaged $56.71 in 2005, $66.23 in 2006 and $72.36 in 2007. Oil rose to an intraday record $120.93 today on speculation demand will rise during the peak U.S. summer driving season.

Before you blow the guy off as an energy extremist, his $105 target 3 years ago was widely derided ("another Henry Blodget wannabe").

It turns out he was way too conservative -- The price shot $16 higher than his "ridiculous" target, and a year earlier than forecast.

I am not saying we are going to see $200 oil, but do not be too quick to blow off Murti.

Source:
Goldman's Murti Says Oil `Likely' to Reach $150-$200
Nesa Subrahmaniyan
Bloomberg, May 6 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=ayxRKcAZi630&

Ask Your Doctor About GASTAXADROPPIN

Monday, May 05, 2008 | 03:30 PM

in Commodities | Consumer Spending | Energy | Politics

Bloomberg:

More than 200 economists, including four Nobel prize winners, signed a petition rejecting proposals by presidential candidates Hillary Clinton and John McCain to offer a gas-tax holiday.

Columbia University economist Joseph Stiglitz, former Congressional Budget Office Director Alice Rivlin and 2007 Nobel winner Roger Myerson are among those who signed the letter calling proposals to temporarily lift the tax a bad idea. Another is Richard Schmalensee of the Massachusetts Institute of Technology, who was member of President George H.W. Bush's Council of Economic Advisers.

The moratorium would mostly benefit oil companies while increasing the federal budget deficit and reducing funding for the government highway maintenance trust fund, the economists said.

"Suspending the federal tax on gasoline this summer is a bad idea, and we oppose it,'' the petition says. Economist Henry Aaron of the Brookings Institution is among those circulating the letter and said most signers are economists. Aaron said that while he supports Obama, the list includes Republicans and Clinton supporters.

Sad but true.

Ben Sargent via Yahoo!

Source:
More Than 200 Economists Denounce Clinton, McCain Gas-Tax Plans
Brian Faler
Bloomberg, May 5 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=aTzCmqCNyLho&r

Oil > $120

Monday, May 05, 2008 | 11:36 AM

in Energy | Markets | Technical Analysis

While some traders feared that the dissolution of Yahoo would impact the market negatively, it appears that the $4 pop in Crude is the bigger issue.

This morning Crude Oil broke over $120, to set a new record, as reported by Briefing.com and Bloomberg COMDX ("Crude moves above the $120 level, now up $3.74 to $120.06").

>
Crude Oil June 2008

Source Bar Charts

You can get the most recent futures data via bar charts (including intraday prices)

McCain & Clinton Fail Economics 101

Thursday, May 01, 2008 | 07:22 AM

in Commodities | Energy | Politics

I don't know why, but I always seem to be surprised by the pandering of politicians. I guess that makes me somewhat naive.

The latest bit of idiocy from two of the three candidates for the highest office in the land was a suggestion that federal gasoline taxes -- 18.4 cents a gallon -- be suspended from Memorial Day to Labor Day. To his credit, Barack Obama dismissed this as counter-productive gimmick. I don't have a horse in this race, but I am heartened to see at least one candidate is not clueless. (Note: Please don't email me saying why I should support this idiot over that one; I am not rooting for any of them -- although if this keeps up, I may shift from the neutral column).

A quick lesson in Supply & Demand 101 for the ~~Maverick~~ McSame and Yoko: Strong demand and limited supply of a product lead to price increases. If you artificially lower the price of something -- i.e., waive taxes for a period of time -- all you will have accomplished was stimulating more demand. The higher demand and increased consumption eventually lead to even higher prices.

Hence, the expression the cure for high prices is high prices.

Put this plan into effect and long before summer's end, gasoline prices would have risen to the pre-tax holiday levels. Then, we slap that tax back on, and the electorate is pissed at you. Then, neither of you gets elected. Not only bad economics, but bad politics.

We have no energy policy, and none on the horizon. Candidates serious about the issue of high energy prices should be discussing increased CAFE standards, capital gains tax waivers for alternative energy investments, greater offshore drilling, Pigou taxes, rapid nuclear plant approvals, a huge increase in the basic R&D the government does on energy -- a Manhattan project for energy and transportation science.

Instead, we hear proposals about waiving an 18 cent tax.

~~~

On a related but very different issue, if any of the campaigns wants some free advice as to a major theme/issue no one has tapped into yet, give me a call. Hint: It has to do with reality. It probably works best for the Obama campaign (a blue collar issue that will help him with the elitist charges) but I could not care less who pushes it -- only that it gets pushed. (Longtime BP readers should be able to figure it out).

The caveat: I know nothing about politics, but a little something about data analysis, markets and the economy.

courtesy of NYT

See also:

Oil Price Rise Fails to Open Tap
JAD MOUAWAD
NYT, April 29, 2008
http://www.nytimes.com/2008/04/29/business/worldbusiness/29oil.html

Tax cut could push gas prices higher
Steve Hargreaves, CNNMoney.com staff writer
CNN Money April 29, 2008: 11:59 AM EDT
http://money.cnn.com/2008/04/29/news/economy/gastax_cut/index.htm

Dumb as We Wanna Be
THOMAS L. FRIEDMAN
NYT, April 30, 2008
http://www.nytimes.com/2008/04/30/opinion/30friedman.html

Fuel Gauge

Tuesday, April 22, 2008 | 07:30 PM

in Consumer Spending | Energy

In light of today's ~$120 Oil, this is all too true:

Crude Oil = $120

Tuesday, April 22, 2008 | 03:00 PM

in Commodities | Energy | Technical Analysis

Well, almost. The May 2008 Futures contract hit $119.90 -- that's the all time high for Crude Oil.

Here's a quick excerpt from Bloomie:

"Crude oil rose to a record $119.90 a barrel in New York as the dollar dropped to an all-time low against the euro, prompting investors to purchase commodities as an inflation hedge.

The dollar touched $1.60 per euro for the first time after European Central Bank policy makers signaled they may raise interest rates because of inflation. Oil's 24 percent surge this year has pulled gasoline and diesel fuel to records, weighing on an economy already reeling from a credit crisis.

Crude oil for May delivery advanced $1.69, or 1.4 percent, to $119.17 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures reached $119.90 today, the highest since trading began in 1983. Prices are up 88 percent from a year ago.

The May contract expired today. The more-active June futures contract rose $1.35, or 1.2 percent, to $117.98 a barrel."

There is a huge contingent that simply refuses to believe in the rally in Oil -- since around $40.

Source:
Crude Oil Reaches All-Time High Above $119 on Record Euro
Mark Shenk
Bloomberg, April 22 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=aGASa6pCjCrs&

Fear of Missing A Rally

Friday, April 18, 2008 | 02:15 PM

A friend who is a fund manager asked me the following question today: What's the greater fear, missing a rally, or owning equities that go down?

Today's rip-roarin expiration day market rally might help answer that question. The fear of missing the rally certainly appears to be the much greater sin -- at least to most professional managers today.

Now consider this interesting variation (This one should definitely get the attention of trend followers).

John Roque -- the very smart technical analyst for Natixis Bleichroeder -- John relates how he continues to hear on CNBC and from clients that “financials are cheap…we’re doing selective buying.” Or, “We’re buying financials down here. They’ve been destroyed.” Or, “The financials are raising capital and getting the deals done. The worst is over. We’re buying some good ones.”

Now, compare that attitude with typical investor interest/sentiment about oil, food commodities, or natural resource stocks. Extended! Overbought! Driven by speculation!

So if you are looking for a true contrary trade, which do you choose:

- The one in a long-term uptrend with no sign of any technical weakness, widely disbelieved the whole way up?

- Or, do you go for the relentlessly beat up, long term down trend -- the one if you are buying here, you are merely guessing the worst is over.

Thanks to John Roque of Natixis Bleichroeder, here's the relative Market Cap of S&P Energy versus S&P Financials:

courtesy of Natixis Bleichroeder

Pre-Revision CPI: 9%

Thursday, April 17, 2008 | 11:20 AM

in Commodities | Data Analysis | Energy | Inflation

I have been trying to wrap my head around how the US is enjoying such modest inflation,while Eurozone and Asia are both stricken with much more robust price rises.

As I was mulling this over, Martin Hutchinson reminded us that BLS changed its methodology this year for seasonal adjustments. Hmmm, I wonder if that had any impact?

"Before the adjustment for typical seasonal price fluctuations, the CPI increase was 0.9%. The Bureau of Labor Statistics, which compiles the index, has generally adjusted March numbers downward. In the decade 1998-2007, the average drop was 0.2 percentage points, and the maximum was 0.3. But this year it was 0.6 percentage points. The BLS changed its adjustment methodology in January 2008, but the process appears to have gone wrong.

If this year had followed the 10-year average, the monthly inflation would have been 0.7%, which annualises to an annual rate just below 9%.

That is remarkably close to the inflation rate in China, where the central bank is busy raising rates and squeezing financial institutions. It's well above the rate in the eurozone, where the European Central Bank has held rates constant, without letting troubled banks run out of money. But the Fed has been cutting while prices rise."

That's a little closer to reality than the reported nonsense we got yesterday.

Unless of course you believe that food prices in the US have only risen 4.5% over the past 12 months. Other countries with much stronger currencies are suffering from global food inflation in the double digits -- but we of the free-falling American Peso have inflation under control. Does that smell kosher to you?

And Energy prices up 17% year over year?

Bill King reminds us we know one thing for sure: The lower the CPI is, the more we measure inflation as growth, all the better to generate a higher-than-warranted GDP, and obfuscate the deteriorating economic and financial condition.

Sources:
Let's stop fooling ourselves
Martin Hutchinson
Considered view, 16 Apr 2008 08:14
http://www.breakingviews.com/2008/04/16/Global%20inflation.aspx?sg=breakingstories

Consumer Price Indexes (CPI)
http://www.bls.gov/CPI/
http://www.bls.gov/news.release/cpi.nr0.htm

The Air Car

Tuesday, April 15, 2008 | 04:00 AM

in Energy | Technology | Venture Capital

Compressed Air Vehicles

Here Comes the Economic Stimulus!

Friday, March 14, 2008 | 04:00 PM

in Commodities | Economy | Energy | Taxes and Policy

GE's Immelt on GE's Green Initiatives

Thursday, March 13, 2008 | 05:00 PM

in Commodities | Energy | Financial Press

Wanna have a good laugh? Check out WSJ OpEd columnist (and therefore suspect wingnut) Kim Strassel asking questions of General Electric's CEO Jeff Immelt about GE's Green initiative.

Immelt does a good job in responding to her (he managed not to call her a tool); But you can see he is less than enthralled with her line of questioning.

If the video glitches on you, just click on the time bar at bottom of the flash video frame to advance.

Is it just me, or are you almost embarrassed for Immelt?

Crude Oil = $107

Monday, March 10, 2008 | 11:00 AM

in Commodities | Energy | Technical Analysis

Briefing.com: Crude oil touches $107pbl, now up $1.55 to $106.70pbl (COMDX)

Amazing. Here is the April 08 Crude Oil Futures chart:

>
Thank goodness this is not part of the Core!

There will be Blood Oil Price Gains

Tuesday, March 04, 2008 | 06:00 AM

in Economy | Energy | Technical Analysis

As we mentioned yesterday, Crude broke its previous high of $103.76.

"The surge in energy prices is taking place as investors seek refuge in commodities to offset a slowing economy and a declining dollar. Analysts pointed out that financial institutions like pension funds and hedge funds are also buying oil and other commodities like gold as hedges against a rise in inflation.

That trend is expected to continue, especially after Ben S. Bernanke, the chairman of the Federal Reserve, signaled last week that he was ready to cut interest rates further to bolster economic growth, despite rising consumer prices.

“When investors lose confidence in the central bank, they tend to look for hard assets,” said Philip K. Verleger, an economist and oil expert. “The Fed’s capitulation on inflation is driving investors to commodities.”

The latest catalyst for the spike in energy prices has been the recent fall in the value of the dollar, analysts said. Currency traders are selling dollars and buying euros to take advantage of the difference in interest rates between the United States and Europe. Like many commodities, oil is priced in dollars on the international market. A falling dollar tends to buoy oil prices in part because consumers using stronger currencies, like the euro or yen, can afford to pay more per barrel.

Apologies if this line of argument looks familiar --we've been hitting these notes for quite a long while . . .

Source:
Oil Tops Inflation-Adjusted Record Set in 1980
JAD MOUAWAD
NYT, March 4, 2008
http://www.nytimes.com/2008/03/04/business/worldbusiness/04oil.html

Oil = All Time (Inflation Adjusted!) High

Monday, March 03, 2008 | 12:53 PM

in Commodities | Currency | Energy | Technical Analysis

click for updated chart

Oil prices today passed their all time, inflation-adjusted record, just kissing the underside of $104 dollars. As the chart above shows, crude prices have broken out from a 6 month consolidation between $85 and $95.

The commodity looks like it has legs, which is trader talk for its going higher. While I do not make a habit of forecasting commodity prices, $110, and then $125 are our next two targets.

I got your core inflation right here . . .

Roll Out the Barrel . . .

Friday, February 29, 2008 | 04:00 PM

in Commodities | Consumer Spending | Energy

We'll have a barrell of fun!

~~~

Screaming Hot Producer Prices

Tuesday, February 26, 2008 | 11:33 AM

in Commodities | Energy | Inflation

chart via brian jacobs

After too many months of inflation data telling anyone with a barely functioning cerebral cortex that significant price inflation was at hand, this month seems to have jarred the denialists into a very belated recognition of reality.

As the delightful chart porn above shows, the costs of materials for food, energy and finished goods is up significantly.

Bloomberg notes:

"Prices paid to U.S. producers rose more than twice as much as forecast in January, pushed up by higher fuel, food and drug costs, signaling inflation may keep accelerating even as growth slows.
The 1 percent increase followed a 0.3 percent drop in December, the Labor Department said in Washington. The median forecast in a Bloomberg News survey of economists was for a 0.4 percent gain. Excluding food and energy, so-called core wholesale prices climbed 0.4 percent, the most in almost a year."

Here's the money quote from BLS:

"From January 2007 to January 2008, the index for finished goods moved up 7.4 percent. Over the same period, prices for finished energy goods climbed 22.6 percent, the index for finished consumer foods rose 8.3 percent, and prices for finished goods other than foods and energy advanced 2.3 percent. For the 12 months ended January 2008, the index for intermediate goods increased 8.8 percent, and prices for crude goods jumped 31.3 percent."

Jeebus! Finished energy products, +22.6%! Finshed consumer goods, +8.3%

Lag this . . .

Sources:

Producer Price Indexes - January 2008
http://www.bls.gov/news.release/ppi.nr0.htm

Producer Prices in U.S. Increase More Than Forecast
Bob Willis
Bloomberg, Feb. 26 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=aOQJ_vlxPtvE&

Just Married

Friday, February 22, 2008 | 04:00 PM

in Economy | Energy | Inflation

Sadly amusing:

Tom Toles via Yahoo!

Inflating Our Way Into Recession

Wednesday, February 20, 2008 | 07:37 AM

Chart courtesy of Bill King, M. Ramsey Securities
>

For quite some time in these pages, we have been lamenting the mistaken belief amongst some on Wall Street that there was a free lunch to be had. Lowering interest rates, the Panglossians argued, would stimulate the economy, whose slowdown would prevent inflation.

If that argument strikes you as both circular and contradictory, welcome to the club. That obvious flaw was apparently lost on its authors, who required a 2 X 4 across the skull to show them the error of their ways.

That swing of the lumber took place yesterday -- even as demand supposedly weakened -- when Crude Oil passed $100 a barrel on a closing basis for the first time. OPEC nations are expected to reduce output when they meet next on March 5th.

But don't think its just Oil. The promiscuity of the US Federal Reserve has led to all manners of dollar-denominated commodity price surges:

-Gold soared $26
-Platinum exploded $91
-Iron-Ore Prices Up 65-71%
-Copper surged 20 handles
-Wheat prices surge to new high
-Soybeans traded at a record high.
-Fertilizer makers soared to record share prices

Then there's gasoline. A survey of prices shows the rising impact of inflation. Gasoline has rallied from $2.22 on Feb. 7 to a record $2.62 yesterday. This is an 18% increase in less than two weeks – and drive season buying is still way ahead of us. These increases have yet to work their way through to the consumer; the economic impact of energy costs still lay off in the future.

One would imagine that expectations of ebbing inflation would be dashed by now. One would be wrong.

As we have seen time and again on the Street of Dreams, Wall Street pundits take months, if not years, to accept what is before their very eyes. Whatever you want to call it -- cheerleading or Cognitive dissonance -- it is a fact of life that the obvious takes much longer to be accepted than is logical. Hence, this simple numerical inflation fact, reflected in global food prices, record energy and both industrial and precious metal inflation, will be ignored for as long as possible.

Maintaining this denial of reality is becoming increasingly difficult. Yesterday, Wal-Mart reported Q4 earnings,, and its becoming increasingly difficult to deny reality. Net sales rose 8.3% to $106.3 billion, while earnings rose 4% to $4.1 billion, or $1.02 a share. The big increase in sales reflected a combination of new store openings and of course, gasoline and food price increases.

Sales at stores open at least a year were sluggish, up 1.6% rise over the year-ago period. Excluding fuel costs, sales rose 1.4%. However, Wal-Mart (Costco also) do not break out food prices from their reports. Hence, Wal-Mart sales were likely much weaker than the headline number, reflecting inflation. We suspect that's why the company lowered its Q1 and FY ’08 forecasts.

So why this foolhardy approach? Why, as Bill King calls it, "Inflate or Die" ? Several theories abound, led by Fed hubris and/or incompetence.

I'm not sure I buy that. A more likely possibility is what John Cassidy describes in A Bankers' Bailout:

"The rescue operation brings to mind John Kenneth Galbraith's dictum that in the United States, the only respectable form of socialism is socialism for the rich."

Indeed.

~~~

Consumer Prices (CPI) is out today at 8:30am. Producer prices (PPI) are ~~mysteriously MIA~~ due on February 26. . .

Sources:

Weakening Demand? Oil Still Passes $100
By NEIL KING JR. and ANA CAMPOY
February 20, 2008; Page A3
http://online.wsj.com/article/SB120346863077378499.html

Opec worries drive oil price to $100 close
Andrew Clark in New York
The Guardian, Wednesday February 20 20
http://www.guardian.co.uk/business/2008/feb/20/oil.globaleconomy

With Iron-Ore Price Hikes Like This, Who Needs a Monopoly?
Heidi Moore
Deal Journal, February 19, 2008, 12:13 pm
http://blogs.wsj.com/deals/2008/02/19/with-iron-ore-price-hikes-like-this-who-needs-a-monopoly/

Wary of economy, Wal-Mart cautions on '08
David Goldman
CNNMoney.com, February 19 2008: 10:43 AM EST
http://money.cnn.com/2008/02/19/news/companies/walmart_earnings/?postversion=2008021908

The Bankers' Bailout
John Cassidy
Portfolio, March 2008 http://www.portfolio.com/views/columns/economics/2008/02/19/Massive-Bailout-Planned-for-Banks

NYC Temp: 11 degrees

Monday, February 11, 2008 | 09:00 AM

in Commodities | Energy | Psychology/Sentiment

I wake up early this morning, send Max out to get the papers, and look at the Oregon Scientific thermometer.

11 Degrees.

Watch energy prices today -- oil and nat gas in particular. While local temperatures should have little impact on global energy prices, sometimes the psychology impacts traders. And Chicago is utterly freezing also.

Is this rational?

Not at all -- but sometimes, us monkeys ain't so rational . . .

Cramer: "Ethanol is a fuel that doesn't work"

Saturday, February 02, 2008 | 04:30 PM

in Energy | Taxes and Policy

Cramer -- who spews out on so many things he can't help but be wrong on many of them -- al least gets the problems with Ethanol right:

"The bemused best-selling author noted the "utter inconsistency" of laissez faire.

"We want laissez faire when it comes to business -- except when it comes to the insistence of a politically popular but economically and environmentally hazardous renewable fuel, ethanol," he said.

As a result, he said we have unequivocal government support for a fuel that doesn't work and that raises the price of food for everyone including those who can least afford it, which, in turn, forces the Federal Reserve to keep the money supply tight to rein in resulting inflation.

"So we are laissez faire when it suits us … and we are anti-laissez faire when we can help farm states crucify us on a cross of ethanol," he said.

He railed against a tax structure that supports "tax rates for billionaires at a lower percentage level than those who make $30,000 a year. This is utterly shameless."

Populism lives . . .

Source:
Jim Cramer challenges 'laissez faire' government
Jan. 30, 2008
http://www.bucknell.edu/x40027.xml

~~~
ADS BY GOOGLE

Crude Oil = $100

Wednesday, January 02, 2008 | 12:41 PM

in Commodities | Energy | Technical Analysis

TBP: Wow! Congratulations, Mr. Crude Oil, that's quite a number

CRUDE OIL: Well, I appreciate your saying so -- its been a long time coming.

TBP: What do you attribute this accomplishment to?

CRUDE OIL: Well, there are many, many people who share this honor. If I may, I'd like to thank the people who made this possible:

-Fed Chair Greenspan for your absolute commitment to debasing the Dollar and sparking this current round of inflation;

-Fed Chair Bernanke, for not deviating too far from Greenie's policies.

-To the people of China and India now entering the middle class -- mucho appreciado for your newfound consumption habits! Just keep doing what the Americans do and you will be all right;

-To the American people -- keep on truckin' -- and keep on buying SUVs and large vehicles

-To the US Congress, for your steadfast commitment to ethanol (tee hee) -- and what has to be the greatest energy policy in the world!

-And of course, to Messrs Bush and Cheney, for starting not one but two shooting wars in the Middle East.

Thank you all! It wouldn't have been possible without each of you !

TBP: Thanks Mr. Crude Oil -- come by anytime . . .

Crude Oil, Intra Day February Contract, January 2, 2008 (blue)

Performance of Commodity Sub-Groups

Monday, December 31, 2007 | 03:00 PM

in Commodities | Energy

Mike Panzner takes a look at the Commodity Research Bureau Index for 2007.

This year (2007), its is up 16.6%.

Given all the headlines about near-$100 oil, people might naturally assume the best-performer among the six sub-groups is energy.

That would be wrong.

In fact, the grains are the king of commodities during 2007. That sub-group, which includes wheat, corn, and soybean futures, has outpaced the CRB index by 34.61%, around twice that of the energy complex.

Performance of CRB Sub-Groups Relative to CRB Index (2007)

CRB          % Thru
Sub-Group    12/26/07
=============== ======
Grains             34.61
Energy             17.19
Precious Metals 6.33
Industrials          0.31
Livestock          -15.24
Softs                -18.52

Oil Movements

Friday, December 28, 2007 | 01:30 PM

in Commodities | Energy | Financial Press | Web/Tech

With oil over $97 today, I thought this graphic from FT was apropos:

The rising oil price, which flirted with $100 a barrel this week, risks pushing the global economy, already threatened by the credit squeeze, into a deep and prolonged slowdown. Our map examines the world’s largest oil producers, consumers, and how oil flows around the world